The government said on Thursday the widening trade deficit is not a cause of concern as foreign exchange inflows from other sources are balancing it out.
"It does not matter at all," Finance Minister P Chidambaram said when asked whether the growing trade deficit was a cause of concern.
On Wednesday, the government announced that the trade deficit in the first eight months of this fiscal has grown to $36.04 billion, much higher than $27.64 billion in the same period last year.
He said the current account deficit is still under control and there was a fair increase in flow of capital and other invisibles like remittances by Indians abroad.
The Mid-Year Economic Review tabled in Parliament on Monday had also said: "it seems unlikely that the current level of such deficit would be a cause of alarm."
"A moderate current account deficit is considered desirable in a capital-scarce developing economy to supplement domestic savings and support investment... it is difficult to be definitive about the sustainable level of current deficit," the review added.
Exports in the first eight months of the current fiscal, posted a 39 per cent year-on-year increase to $80 billion. Imports in the April-November period increased to $115.63 billion during this period as against $84.7 billion of the corresponding period in 2005.
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